Case Study #2
1. Why is parts inventory management so important at Southwest Airlines? What business processes are affected by the airline’s ability or inability to have required parts on hand?
Southwestern airlines are very high profile airlines with over 500 aircraft in 68 cities, and revenues of upward to $10.1 billion (Laudon&Laudon 2011).
In order to maintain and to keep their good reputation Southwestern must be able to keep available supplies and extra inventory in stock and readily available. With over $325 million in service parts and inventory (Laudon&Laudon 2011), the company needs a strategic plan to manage this process on a daily basis to insure that all supplies are on hand. Richard Zimmerman, southwest’s manager of inventory management, stated that “there’s a significant cost when we have to ground aircraft because we ran out of a part. The long term, cost effective way to solve that problem was to increase productivity and to ensure that our maintenance crews were supported with the right spare parts, through the right software application (Laudon&Laudon 2011).
References
Laudon, K. C., & Laudon, J. P. (2012).
Management Information Systems: Managing the Digital Firm. Upper Saddle River, N.J: Prentice Hall.
2. Why management, organization, and technology factors were responsible for Southwest’s problems with inventory management?
Southwest experienced non visibility with in their legacy system, so in turn at times information that was needed was readily available, but then again there were times that pertinent information on supplies was not viewable. Information about what replacement parts were available at a given time was difficult or impossible to acquire, and that affected response times for everything from mechanical problems to part fulfillment (Laudon&Laudon 2011).
The Term Paper on Analysis Of Scientific Glass Inventory Management Finance
The products of Scientific Glass include customized and specialized glassware for a variety of organizations such as pharmaceutical companies, hospitals, research labs, quality-control sites and testing facilities. By January 2010, a substantial increase in their inventory balances tied up the capital needed for investment for expansion. The debt-to-capital ratio exceeded the 40% target preventing ...
This glitch in the system could cause for major misunderstanding because the information needed to get the correct inventory was not available. If an aircraft were to need maintenance the parts would be on hand because of the systems failure.
References
Laudon, K. C., & Laudon, J. P. (2012).
Management Information Systems: Managing the Digital Firm. Upper Saddle River, N.J: Prentice Hall.
3. How did implementing the i2 software change the way Southwest ran its business?
I2 Demand Planner Software has helped Southwestern in many ways. The system improves Southwest’s forecast for all of the part location combinations in its system, and provides better visibility into demand for each part. Planners were able to differentiate among individual parts based on criticality and other dimensions such as demand volume, demand variability, and dollar usage (Laudon&Laudon 2011).
By implementing i2 technology Southwest Airlines will now have a better flow, accessibility, and better data management. The implementation of the i2 system will help Southwest maintain their customer relationships, it will help to keep ticket cost down, and supplies will be readily available in case a mishap occurs.
References
Laudon, K. C., & Laudon, J. P. (2012).
Management Information Systems: Managing the Digital Firm. Upper Saddle River, N.J: Prentice Hall.
4. Describe two decisions that were improved by implementing the i2 system.
The decision to improve their current Legacy Information System was very critical to the airlines business. By not obtaining the proper technology to maintain or manage the supply chain and inventory it could have caused a loss in revenue, aircrafts, and reliability of service. Implementing the i2 system increased availability of parts, increased speed and intelligence of decision making, reduced parts inventory by 15 percent, saving the company over $30 million, and increased service levels from 92 percent to over 95 percent (Laudon&Laudon 2011).
The Term Paper on Management Information System in Marketing Information System
Market information system may be defined as factual knowledge about the action, antecedents or consequences of social actors outside or inside the firm and the environment in which they operate. Social actors are as consumers, completions, employee, institutions, suppliers, wholesalers, retailers, govt. bodies and NGO’s. The environment actors are physical, technological, economic, legal and ...
References
Laudon, K. C., & Laudon, J. P. (2012).
Management Information Systems: Managing the Digital Firm. Upper Saddle River, N.J: Prentice Hall.
